The federal government will soon need to make a choice between saving factory jobs or keeping a hands-off approach to gas exports.
The government announced in June it would implement the Australian Domestic Gas Security Mechanism to ensure sufficient natural gas to meet consumers' needs.
The mechanism - also known as the "gas trigger" - requires, if necessary, LNG projects which draw gas from the domestic market to limit exports or to find offsetting sources of new gas.
The government is awaiting a report from the Australian Competition and Consumer Commission into gas supply and demand, which would inform Treasurer Scott Morrison's decision on when to pull the trigger.
Labor leader Bill Shorten says the decision should be made immediately as it was obvious rising gas prices and looming shortages risked damaging the economy.
ACCC chairman Rod Sims said the gas supply outlook for 2018 now appeared worse than at the time of the commission's first gas report in March 2016.
This was because projected production was lower, domestic demand was higher and a significant quantity of gas is expected to be sold on the international LNG spot markets in excess of contract requirements, he said.
As well, international prices were at all time lows and Australian prices were at all time highs.
Mr Sims said the government - which faces industry criticism for flagging interference in the gas market - did not have many options.
"It is easy to criticise the Australian Domestic Gas Security Mechanism," he said.
"(But) consider the choices - the federal government may be faced with a choice of pulling the trigger on the mechanism on the one hand, or seeing factories close and jobs lost."
Mr Sims acknowledged energy affordability had gone from "being a source of economic advantage to Australia to the opposite".
"I think it would be very sad to see firms fail just because our east coast gas market is dysfunctional," he told the National Press Club on Wednesday.
Mr Shorten said it was "mind-boggling" the Turnbull government is refusing to pull the gas export control trigger.
"What on earth are they waiting for?"
Mr Shorten said Labor wanted to give the Australian Energy Market Operator some "teeth" by fast-tracking reforms to improve gas market transparency, giving Australian manufacturers a head start in gas contract negotiations.
The gas issue was part of a bigger crisis in the energy sector, he said.
"Turnbull can do four things right now to help fix the energy crisis: pull the gas trigger, end the war on renewables, implement a clean energy target and stop the summer blackouts by developing more strategic reserves," Mr Shorten said.
